Contrasting ProAssurance (NYSE:PRA) and RenaissanceRe (NYSE:RNR)

RenaissanceRe (NYSE:RNR) and ProAssurance (NYSE:PRA) are both finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, earnings, profitability and institutional ownership.

Earnings and Valuation

This table compares RenaissanceRe and ProAssurance’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RenaissanceRe $4.20 billion 1.97 $748.80 million $9.13 18.24
ProAssurance $999.83 million 1.47 $1.00 million ($0.81) -33.63

RenaissanceRe has higher revenue and earnings than ProAssurance. ProAssurance is trading at a lower price-to-earnings ratio than RenaissanceRe, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings for RenaissanceRe and ProAssurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RenaissanceRe 1 3 2 0 2.17
ProAssurance 1 3 1 0 2.00

RenaissanceRe currently has a consensus price target of $186.67, suggesting a potential upside of 12.11%. ProAssurance has a consensus price target of $23.00, suggesting a potential downside of 15.57%. Given RenaissanceRe’s stronger consensus rating and higher possible upside, equities research analysts plainly believe RenaissanceRe is more favorable than ProAssurance.

Dividends

RenaissanceRe pays an annual dividend of $1.44 per share and has a dividend yield of 0.9%. ProAssurance pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. RenaissanceRe pays out 15.8% of its earnings in the form of a dividend. ProAssurance pays out -24.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. RenaissanceRe has raised its dividend for 1 consecutive years and ProAssurance has raised its dividend for 1 consecutive years.

Risk & Volatility

RenaissanceRe has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, ProAssurance has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500.

Profitability

This table compares RenaissanceRe and ProAssurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RenaissanceRe 12.46% 2.44% 0.51%
ProAssurance -27.87% -6.92% -2.09%

Institutional & Insider Ownership

93.2% of RenaissanceRe shares are owned by institutional investors. Comparatively, 80.5% of ProAssurance shares are owned by institutional investors. 1.6% of RenaissanceRe shares are owned by company insiders. Comparatively, 1.7% of ProAssurance shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

RenaissanceRe beats ProAssurance on 14 of the 16 factors compared between the two stocks.

RenaissanceRe Company Profile

RenaissanceRe Holdings Ltd. provides reinsurance and insurance products in the United States and internationally. The company operates through Property, and Casualty and Specialty segments. The Property segment writes property catastrophe excess of loss reinsurance and excess of loss retrocessional reinsurance to insure insurance and reinsurance companies against natural and man-made catastrophes, including hurricanes, earthquakes, and other windstorms, as well as claims arising from other natural and man-made catastrophes comprising tsunamis, winter storms, freezes, floods, fires, tornadoes, explosions, and acts of terrorism; and other property class of products, such as proportional reinsurance, property per risk, property reinsurance, and binding facilities and regional U.S. multi-line reinsurance. The Casualty and Specialty segment writes various classes of products, such as directors and officers, medical malpractice, and professional indemnity; automobile and employer's liability, casualty clash, umbrella or excess casualty, workers' compensation, and general liability; financial and mortgage guaranty, political risk, surety, and trade credit; and accident and health, agriculture, aviation, cyber, energy, marine, satellite, and terrorism. It distributes its products and services primarily through intermediaries. RenaissanceRe Holdings Ltd. was founded in 1993 and is headquartered in Pembroke, Bermuda.

ProAssurance Company Profile

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Workers' Compensation Insurance, Segregated Portfolio Cell Reinsurance, and Lloyd's Syndicate segments. It offers professional liability insurance for healthcare providers and institutions, and attorneys; liability insurance for medical technology and life sciences risks; and workers' compensation insurance, such as guaranteed cost policies, policyholder dividend policies, retrospectively rated policies, and deductible policies, as well as alternative market solutions that include program design, fronting, claims administration, risk management, SPC rental, asset management, and SPC management services for employers, groups, and associations. The company also participates in Lloyd's of London Syndicate 1729, which underwrites property and casualty insurance, and reinsurance; and Syndicate 6131 that underwrites contingency and specialty property insurance. ProAssurance Corporation markets its products through independent agencies and brokers, as well as an internal sales force. The company was founded in 1976 and is headquartered in Birmingham, Alabama.

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